Türkiye has leaned back into stimulus this month, with the central bank delivering a bigger than expected rate cut and edging closer to scrapping its costly FX-protected deposit scheme. Inflation is slowing, the Lira has held broadly steady and Ankara is talking up a coordinated policy push to anchor the disinflation path. Beneath that, fiscal pressures are building, political risk is still in the mix and a quieter tightening of foreign-currency borrowing rules hints at where the next clampdowns could come from.
Monetary Policy
The Central Bank of the Republic of Türkiye (CBRT) broke its four-month pause on 24th July, cutting the main policy rate by 300bp to 43%. That is well above the 100–200bp consensus and puts Türkiye squarely among the more aggressive EM easers this quarter. Officials framed it as confidence in the “lasting disinflation process”, with July inflation dropping to 33.5% and the 2025 forecast still anchored in a wide 19/29% range. The next leg down, they say, will be ...
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